View more on these topics

Data provider FE switches to clean share classes


FE will switch to clean share classes for its fund rating system, ahead of changes from the Investment Association later this year.

The data, research and ratings provider will switch the share class it uses for the basis of its FE Crown and FE Passive Crown ratings to the highest charging clean share class from 18 January.

Currently the primary share class used as the basis for ratings and sector rankings is the highest charging, including bundled share classes.

However, in February last year the Investment Association consulted on changes and determined a fairer system would base performance data on the clean share classes through which most investors access the fund.

FE data director Sam Walker says: “The historical premise for basing the rating on the highest charging share class, which has been in line with industry best practice and also the trade body, was to assure that all investors were getting a fair deal, and to ensure that all funds were being measured on the worst experience of any investor.

“Of course the limitation of this approach is that it fails to support investors looking to make new investments in clean share classes; we risk misleading people who want to conduct a like-for-like comparison on funds during their evaluation processes.”

Under the changes, asset managers can base a fund’s performance on just the history of the clean share class, or they can tack on the performance from the bundled share class.

Asset managers that had an existing institutional share class pre-RDR and converted it into an RDR share class for retail clients, rather than setting up a separate unbundled share class, could benefit from the move as they will have a longer track record for the clean share class.

The move could lead to a significant re-shuffling of sector rankings.

In its report on the issue, the Investment Association acknowledged: “Some firms may choose not to use simulated data as there is no regulatory requirement to provide simulated past performance, and that is their prerogative. This would, of course, affect the information used in comparison tables and may mean the primary share class has no performance record over longer periods and so miss out being ranked in those tables.”

FE has made the switch ahead of the Investment Association’s deadline of 18 April, with other data providers expected to make the change by April.

Morningstar and Lipper were not immediately available for comment.



Apfa: Clients need to know what they pay towards regulation

It will come as no surprise to readers of Money Marketing that an issue continually at the top of our members’ wish list for policy action is the cost the current regulatory system imposes on their businesses. While there is clear consensus on the need for consumer protection, particularly given some of the recent misselling […]


Alan Lakey: Catch-22 on commercial decisions

I am a great fan of commercial judgement.  After all most readers would not still be in business if they or their employers hadn’t made sound commercial determinations at some point. Of course, not all commercial judgements are sensible or even well thought through and the end result can be detrimental to one or more parties.  […]

FCA logo glass 2 620x430

Osborne lines up Swiss regulatory chief to replace Wheatley at FCA

Chancellor George Osborne has approached the head of the Swiss financial watchdog as a possible replacement for Martin Wheatley, Sky News reports. Financial Market Supervisory Authority chief executive Mark Branson is among several candidates to have been approached about the position, according to the report. FCA acting chief executive Tracey McDermott, Australian Securities and Investments […]

Keep calm and carry on?

We British are known for our stiff upper lip and just getting on with things. It’s part of our quirky cultural behaviour – like forming orderly queues, or saying sorry when it’s not our fault. Many of us just aren’t that great at talking about what’s bothering us. But if someone feels that the stresses […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm